Global crude oil prices recorded one of their steepest single day drops in recent months on Tuesday, August 4, raising expectations that petrol prices in Nigeria may ease if the decline holds.

Brent crude, the benchmark tied to Nigerian oil exports, fell $6.35 or 7.0%, to settle at $83.77 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $4.33 or 5.1%, to settle at $80.34.

The selloff came after US President Donald Trump announced that a planned military strike against Iran had been suspended in favour of continued diplomatic talks over Tehran's nuclear programme.

Trump said negotiations were still active after Iran and other parties requested more time to reach an agreement, reducing immediate fears over a supply disruption in the Middle East.

Could Nigerian petrol prices come down?

Under Nigeria's deregulated downstream oil sector, pump prices are shaped by a combination of international crude costs, the naira-dollar exchange rate, freight charges, and domestic distribution costs.

A sustained drop in global crude prices generally reduces what importers and marketers pay for refined petroleum products, which can eventually filter through to consumers.

However, industry operators warned that any reduction at the pump would not happen overnight.

Many fuel marketers are currently selling petrol bought at considerably higher international prices, and they are unlikely to cut prices until they have worked through that stock.

Beyond inventory costs, the naira's performance, transportation logistics, and taxes will continue to shape the final price Nigerians pay at filling stations, regardless of where crude trades internationally.

For Nigeria's government, cheaper crude carries its own risks. Lower oil prices typically shrink export earnings and reduce the foreign exchange inflows that the country relies on to support public spending.

Marketers release new rates

Meanwhile, on Tuesday, August 4, depots across Nigeria made little changes to their petrol prices as they monitored developments in the global oil market.

Data obtained from Petroleumprice.ng showed that PMS prices ranged from N1,215 to N1,225 per litre across major depots, with Dangote, Aiteo and Pinnacle selling at N1,215 per litre, while Nepal, Optima and Rain Oil quoted the highest price of N1,225 per litre, a reduction from the average price of N1,300.

Analysts believe Dangote is preparing another price reduction, and this could trigger a new round of price changes.

Depot prices on Tuesday, August 4

Dangote – N1,215 per litre

Aiteo – N1,215 per litre

Pinnacle – N1,215 per litre

African Terminal – N1,216 per litre

Ardova – N1,216 per litre

Integrated – N1,216 per litre

Nipco – N1,216 per litre

Liquid Bulk – N1,217 per litre

Sigmund – N1,217 per litre

Lister – N1,218 per litre

MRS – N1,218 per litre

Mainland – N1,218 per litre

Sobaz – N1,218 per litre

Soroman – N1,218 per litre

Matrix – N1,220 per litre

Northwest – N1,220 per litre

A.Y.M Shafa – N1,223 per litre

Nepal – N1,225 per litre

Optima – N1,225 per litre

Rain Oil – N1,225 per litre.